In a move that creates the largest music empire in the world, Seagram has agreed to buy PolyGram for $10.6 billion. |

Just weeks after halting negotiations with Britain's EMI group, Seagram Co. struck this deal with Netherlands-based Phillips Electronics, which owned 75 percent of the music and movie company. By joining efforts with PolyGram, Seagram's Universal Music Group will shave off overlapping costs totaling nearly $300 million, and will lay claim to 23 percent of the world market share with a revenue of $6.1 billion.

According to Billboard, Seagram will finance the acquisition by making an initial offering of its Tropicana orange juice subsidiary, which is valued at $3.5 billion to $4 billion.

The labels under PolyGram's umbrella include Mercury, Island and A&M, which handle such mega-acts as U2, Metallica, Sting, Hanson and Sheryl Crow. Those artists are now joining the Seagram family, which made a name for itself by making wines and spirits including Absolut Vodka and Captain Morgan rum. The company first broke into the entertainment industry in 1995, when it bought MCA for $5.7 billion.

According to the BBC News, Seagram chief executive Edgar Bronfman told reporters that this merger marks "an important transformation for Seagram."

"With the acquisition of PolyGram we become a global entertainment leader, including the world's largest music company, with a truly impressive roster of musical talent," he said.

Rumors have begun circulating that Seagram may sell off PolyGram's film division, which backed Three Weddings and a Funeral and Trainspotting, among other blockbuster hits. Earlier this month, a spokeswoman for PolyGram told JAMTV that the music giant had suffered great financial hardship during the first quarter of 1998, resulting in a 88 percent plunge in earnings.

It remains uncertain whether this merger will result in the loss of jobs for employees of PolyGram and Seagram, or if any artists will be dropped from the new music empire's roster. (Anni Layne)